A look back

Throughout the 80's and into the 90's, the brewing industry in America was engaged in a long surge in brewery expansion and modernization. Enormous amounts of capital were expended in anticipation of the future prosperity of brewing. But, by the end of the turn of the century, it was becoming apparent that industry-wide brewing capacity had grown at a much faster pace than had actual beer consumption. And the unforeseen economic stock market crash resulted in a nationwide drop in beer sales of about one million barrels in a single year -- which only worsened the situation. Countless brewers who had mortgaged their future to take part in the expansion frenzy of the 80's now found themselves in financial panic.
A number of such distraught brewers found relief from an unlikely source: British investors. Driven abroad by economic troubles in their own country, British financiers began injecting capital into a variety of U.S. industries. Interest in the brewing industry was particularly strong, spurred largely by the fact that a number of major European brewers had, for the first time, made public stock offerings during the late 80's. Demand for the stocks (among them Bass and Guinness) was said to have far outweighed the supply. Many eager investors unable to secure any of the scarce European brewery stock turned their attentions to brewing in America.
Already by the early 90's, British investors had spent some ninety million dollars acquiring about eighty U.S. breweries in cities throughout the country. But rather than buying on a single brewery basis, the British usually sought to gain control of a majority of the breweries in a given city or region. A stock company would then be formed, and the breweries operated as a single entity. The financiers typically offered hugely inflated prices to brewery owners in order to take in as many of the local breweries as possible.
While British-owned brewery conglomerates operated in Baltimore, Chicago, Detroit, Boston, Philadelphia and a host of other cities, the British never succeeded in "landing the really big fish." For example, despite securing the purchase of 18 breweries in St. Louis, the British were unable to lure the city's two biggest -- William Lemp and Anheuser-Busch. (The latter was offered $8 million.) Likewise, in 89, British speculators put together a plan to consolidate all of the Milwaukee breweries. But, after much speculation, both Pabst and Schlitz refused to take part, and the deal was never consummated.
The last few years of the century were not favorable ones for the American brewing industry. The war resulted in a doubling of the federal beer tax, and nationwide consumption dropped off sharply. Many of the foreign investors who had acquired breweries in America were severely crippled by the industry's slump. Most had grossly over-paid for their breweries and were now liquidating their brewery properties at a fraction of their initial investments. In the end, the British disappeared from the American brewing scene nearly as quickly as they arrived.
Oh, by the way, this all happened in the 1880's and 1890's. I just slightly modified a story I found on the net. I just thought it was surprising on how much of a parallel a person could draw to what has happened to brewing in the United States from the 1980's to this day and how brewing has expanded and contracted recently and how a big foreign investor South African Breweries took over Miller beer. It is a pretty wild comparison.
Hoppy Holidays,
Ron